The Mitz and Rozansky 2022-23 Tax Planning Guide is now available. To down load a copy, please click here. https://www.mitzandrozansky.com/wp-content/uploads/2022/09/2022-2023-Tax-Planning-Guide.pdf
The Wisconsin Tomorrow Small Business Recovery Grants, funded by the American Rescue Plan Act of 2021 (ARPA), started taking applications yesterday, May 24th, 2021, from businesses affected by the COVID-19 pandemic. The award amount will be $5,000 per business as long as their annual gross revenue is between $10,000 and $7 million. The application deadline is June 7th, 2021 at 4:30 pm.
Application Link – My Tax Account (wi.gov)
FAQs Link – DOR Wisconsin Tomorrow Small Business Recovery Grant
PPP Loan Availability
Last Friday the SBA and Treasury announced that the second round of the Paycheck Protection Program (PPP) opens today, January 11, 2021, and on Wednesday, January 13, 2021. The exclusive two-day window, on the 11th and 12th of January, is reserved for first-draw PPP loans by community financial institutions that serve minority- and women-owned businesses. Then on the 13th, second draw PPP loans by the same community financial institutions stated above will be available. Shortly after the 13th all participating lenders will have the ability to transmit PPP loans for their clients – there has not been a specified date for when this will occur. There will be $284.5 billion available for these PPP loans, including $35 billion for first-time loans.
Deadline for Applications
March 31, 2021
Calculation of Loan Amount
- First and Second-Time Borrowers
- Can receive up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan
- PPP Loan Borrowers with NAICS codes starting with 72 (such as hotels and restaurants)
- Can receive up to 3.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan
New Qualified Businesses and Expenditures
- Nonprofits including churches
- Sec. 501(c)(6) business leagues – other restrictions apply
- News organizations – other restrictions apply
- Publicly traded companies with certain ownership
- Protective supplies, equipment and modification costs to comply with COVID-19 guidelines
- Property damage related to vandalism or looting that was not covered by insurance or other compensation
- Essential expenditures to suppliers to maintain current operations
- Covered operating expenditures
- Payments for business software or cloud computing service that is used for business operations
- Product or service delivery
- Processing, payment, or tracking of payroll expenses
- Human resources
- Sales and billing functions
- Tracking of supplies, inventory, records and expenses
Qualifications for First-Draw Applicants (up to $10 million)
- In operation prior to February 15, 2020
- Employee Count
- 500 or fewer employees
- Employee Count (food services operations)
- 500 or fewer employees per location
New Qualifications for Second-Draw Applicants (up to $2 million)
- Revenue Reduction Test
- Previously a business only had to certify that they had economic uncertainty in order to qualify for the first round of PPP loans. In the second round, businesses, that are requesting a second PPP loan, must prove they have been impacted by showing they have faced at least a 25% reduction in revenue in a quarter compared to the same quarter from the previous year
- Employee Count
- 300 or fewer employees
- First Round PPP Funds Spent Test
- The borrower must certify that they have used or will use all of the funds from the first PPP loan before receiving the new funds
Borrowers that receive a PPP loan of $150,000 or less will be able to fill out a simplified, one page, forgiveness application. The SBA has not released this simplified form yet, but they have a deadline of January 20, 2021. When applying for forgiveness, applicants must use at least 60% of the funds for payroll between 8 or 24 weeks.
Please stay safe and healthy.
On June 5th, 2020, the Paycheck Protection Program Flexibility Act (PPPFA) was officially signed which will positively impact businesses and self-employed individuals who have received or will be applying for the Paycheck Protection Program (PPP) Loans. Below will be a list of how the PPPFA enhances the PPP Loans:
- Businesses can continue to defer Social Security taxes through the end of 2020
- The percentage of the loan that was required to be used for payroll costs was decreased from 75% to 60%
- The 8-week period to use the funds has been increased to 24 weeks or 12/31/2020 if earlier
- The deadline for employers to return to prior employment / wage levels has been extended from June 30th, 2020 to December 31st, 2020
- The period of loan maturity has been increased from 2 years to 5 years
- Borrowers can now defer payments until the amount of loan forgiveness is determined
Businesses that received their funds before the PPPFA are not forced to abide by the regulations provided by the PPPFA, but they can elect to use them. Also, we want to remind business owners who have not received the loan that these loans still need to be applied for before June 30th, 2020 as that date has not been extended.
Please stay safe and healthy.
The Mitz & Rozansky Team
We’ve added tax update tabs for both personal and business related tax law changes.
Please contact our office at 414-352-3200 for more information on how these changes may affect your individual and/or business taxes.
If you own an IRA and are 70 1/2 or older, a Qualified Charitable Contribution (QCD) can provide you with substantial benefits. At 70 ½, IRA owners are required to make an annual minimum withdrawal (RMD). A qualified charitable distribution can satisfy all or part the amount of your required minimum distribution from your IRA and, at the same time, reduce your taxable income. Using this strategy can benefit both you and your designated charity.
Here’s how it works. A direct transfer is made from your IRA account by your plan to a qualifying charity. This helps the charity. Qualifying charities must be a 501(c)(3) organization that is eligible to receive tax-deductible contributions. Please note that fund distributions made directly to you do not qualify.
The contribution amount, while satisfying all or part of your annual RMD, can in most cases be deducted from your taxable income, potentially lowering your income tax liability.
- You must be 70½ or older to be eligible to make a QCD.
- QCDs are limited to only the amount that would otherwise be taxed as ordinary income. Non-deductible contributions are excluded.
- The QCD maximum annual amount is $100,000. It is the total sum QCD contributions made to any and all charities in a calendar year. Your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.
- For a QCD to count towards your current year’s RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.
- You are not permitted to count any amount donated above your RMD toward satisfying a future year’s RMD.
While a QCD is not subject to Federal withholding, State tax rules may vary.
A QCD contribution requires you to receive the same type of acknowledgement from the charity of the donation you would need to claim any other deduction for a charitable contribution.
Your Mitz & Rozansky tax adviser can help you determine if both your IRA and charity qualify for QCDs. Please contact us at (414)352-3200 to discuss how a QCD can work for you.
The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers. For information on how the new law affects your taxes, please contact Mitz & Rozansky at (414)352-3200 to learn more.
Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.
- Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025
- Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025
- Elimination of personal exemptions — through 2025
- Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025
- Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective for months beginning after December 31, 2018
- Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — for 2017 and 2018
- New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025
- Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025
- Elimination of the deduction for interest on home equity debt — through 2025
- Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025
- Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025
- Elimination of the AGI-based reduction of certain itemized deductions — through 2025
- Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025
- Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year
- AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025
- Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025
- Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%
- Repeal of the 20% corporate AMT
- New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025
- Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
- Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
- Other enhancements to depreciation-related deductions
- New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
- New limits on net operating loss (NOL) deductions
- Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers
- New rule limiting like-kind exchanges to real property that is not held primarily for sale
- New tax credit for employer-paid family and medical leave — through 2019
- New limitations on excessive employee compensation
- New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation
More to consider
This is just a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions. Contact Mitz & Rozansky at (414)352-3200 to learn more about how these and other tax law changes will affect you in 2018 and beyond.
With the possibility of significant tax reform legislation this year, tax planning is more complicated yet more important than ever. To save the most, you need to be sure you’re taking advantage of every tax break you’re entitled to. Our 2017 Tax Planning Guide can help you follow current tax law with an eye on what could happen in the future with any possible legislation.
As you look through the guide, please note the strategies and tax law provisions that apply to your situation or that you would like to know more about. Then contact us with any questions you may have about these or other tax matters.
At Mitz & Rozansky, SC, our professionals are thoroughly familiar with the latest tax law and tax-reduction strategies and are eager to help you take advantage of them. So please call us today (414) 352-3200 to schedule a time to talk about ways to lighten your tax burden and better achieve your financial objectives.
Now more than ever, it is extremely important that as tax payers you utilize qualified tax professionals who will prepare your tax returns and will represent you should you be audited. Too often, tax payers hire someone who does not have the proper licenses and credentials required to be qualified to represent them, particularly given the complexity of the ever changing tax code.
The Tax Code Has Changed
As of January 1, 2016 the IRS tax code requires that anyone representing a taxpayer be qualified according to IRS specifications. To be sure that you will not have to seek additional services to represent you to the IRS, your tax preparation needs to be done by a CPA, Enrolled Agent (EA) or an attorney who is IRS qualified. Tax preparers, who do not otherwise qualify, can also complete the IRS’s voluntary Annual Filling Season Program. Only those who successfully complete the program, receive a Record of Completion allowing them to represent you to the IRS.
Employing qualified professionals not only assures that your tax returns are properly prepared, but it also provides you with a representative who can stand in for you at appearances before the IRS for such issues as audits, appeals and collections. They can speak to directly to an IRS representative on your behalf as well as make appearances for you at IRS hearings involving your tax returns.
At Mitz & Rozansky, LLC our CPA’s and tax preparation specialists prepare your tax return with the utmost care. They work diligently to ensure that you pay only the taxes required and they stand ready to represent you up should any tax related issues arise with the IRS. For additional information about this or any other accounting related matters, please contact us by phone at (414)352-3200 or via email at email@example.com.